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The World Bank is hashing out its approach to Tunisia and Egypt as two of the most distressed sovereigns in the broader Middle East look for external financing in the face of relentless pressure on their economies.
Ferid Belhaj, the lender’s vice president for the Middle East and North Africa, said it won’t back off from supporting Tunisia after temporarily pausing some discussions following an outbreak of violence against Black migrants that’s been blamed in part on comments made by President Kais Saied.
Speaking in an interview in Washington, he also had words of caution for Egypt, which he said needs to take “more and faster” steps toward reducing the state’s footprint in the economy.
Authorities in Egypt are “moving in the right direction but they never move fast enough when it comes to reforms,” Belhaj said on Wednesday. “What we see today in Egypt is a situation that is not as stable as we would like it to be,” he said, referring to the country’s currency, the pound.
Egypt has devalued the pound three times since March 2022 as it faces its worst foreign-exchange shortage in years.
The country struggles to secure foreign direct investment and overseas inflows into its local debt market.
While energy-rich countries, including Qatar and Saudi Arabia, have pledged more than $10 billion in investments, only a fraction of the funding has materialised.
Multilateral institutions like the World Bank are in the spotlight again as some developing nations face higher risks of debt distress just as they contend with slower economic growth while poverty and hunger are on the rise. — Bloomberg
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